The Single European Market

1. The Background of the Freedoms

In order to understand the evolvement of the Single Market of the European Union, one has to take the general background into consideration. Therefore, it is important to have a look at the Treaty on European Union (Maastricht Treaty) which gave birth to the creation of the Single Market. Having been the Common Market before the Maastricht treaty, the European Economic Community (EEC) Treaty already clarified the objective of cooperation between member states. Throughout the Single Market, those objectives should be transformed into reality.

By the signing of the Treaty on European Union (TEU, formal for Maastricht Treaty) in 1992 and its entering into force in November 1993, the European Union was created. Since its inception in 1993, the Single Market has opened up economic and working opportunities that have transformed the lives of hundreds of millions of Europeans. It is one part of the first pillar of the European Union, as it belongs to the European Communities. The second pillar deals with Common Foreign and Social Policy and the third one with Police and Judicial Co-operation in Criminal Matters.

The Single Market made access to larger markets possible and enabled cooperates to reorganise their activities. It made the removal of physical, technical and fiscal barriers, as well as the liberalisation of internal competition through strict competition policies possible. In other words, the Single Market serves as a base for the freedom of goods, services, people, establishment and capital.

2. The Five European Freedoms of Movement

2.1 Free Movement of Goods

The Treaty on European Union deals with five different types of freedom in the EU.

First of all, there is the free movement of goods. The term implies that national barriers to the free movement of goods within the EU are removed. In Articles 28 to 30 of the European Community (EC) Treaty, measures having an effect equivalent to quantitative restrictions in intra-community trade are prohibited (valid for imports and exports). However, the measures do not “preclude prohibitions justified on grounds of public morality, public policy or public security, the protection of health and life of humans, animals or plants, or the protection of industrial and commercial property, as well as other mandatory requirements recognised by the Court of Justice.” To be a bit more detailed, the free movement of goods includes the facilitation of transport across national borders, the elimination of excessive bureaucracy, the fact that one does not have do pay taxes on goods twice, the pricing of goods at each country’s value-added tax, a standardisation of certification of goods, as well as an enforced protection of property rights concerning company’s intellectual property and a general competition policy which helps to reduce anti-competitive behaviour. In order to uphold the effective application of the free movement of goods, the European Commission monitors people’s activities mainly through the complaints by Member States’ citizens. In most cases, barriers to trade within the EU are removed on an amicable base.

2.2 Free Movement of Services

The free movement of services describes the aim that European citizens should have the freedom to provide services in another EU Member State, as well as their right to pursue an economic activity in other Member States through establishment on the market of that Member State. It is fixed in Article 49 of the EC Treaty. In detail, “services” shall include activities having an industrial character, activities having a commercial character, activities of craftsmen and activities of the professions (Article 50). In order to reach the goal of “exchanging” services as if no borders existed, special measures have been taken. Therefore, the European Commission has established in 2000 an Internal Market Strategy of Services in order to remove still existing barriers to trade. Those barriers can be divided into two major categories – legislative barriers and barriers relating to differing practices. To act against violation of the free movement of services, the business process has been divided into six main stages, which are the establishment, the use of inputs, the promotion, the distribution, the sales and the after sales phase.

2.3 Free Movement of People

Third, there is the free movement of people. Since the Schengen Agreement (1990), which was followed by the Schengen Convention, came into force in 1995, controls on people at the internal borders of the Schengen Zone were abolished